2012 News Milestone No. 5

Universal Music Acquires EMI in $1.9B Deal,
Becomes Largest Music Label
Shrinking competition in the recording market ratcheted down again when Universal Music Group succeeded in acquiring core assets of EMI. UMG’s move reduced the number of competing major record labels to three. Only Sony Music and Warner now rival Universal (owned by French media giant Vivendi).

At Issue: With Universal now controlling some 40 percent of the U.S. market, artists will have fewer big-distribution options in shopping their music. UMG also stands to gain significant leverage over licensing agreements and new platforms. Meanwhile, European regulatory requirements that forced Universal to unload two prominent classical labels—EMI Classics and Virgin Classics—will put those labels into market play.

Current status: Sony, Naxos, and Bertelsmann subsidiary BMG all are said to have potential interest in acquiring EMI Classics, whose vaults hold treasured recordings by the likes of Herbert von Karajan, Maria Callas, and Jacqueline du Pré as well as artists of great currency such as composer Thomas Adès and conductor Simon Rattle. Virgin Classics has a distinguished period performance catalogue and a lively contemporary roster that includes countertenor David Daniels and the brothers Renaud and Gautier Capuçon. The market realignment may not become clear for months as Universal proceeds with consolidation and top bidders emerge for the classical labels. A September memo from EMI’s then-chairman Roger Faxon informed the company’s employees that the label sell-off might not be concluded until mid-2013.

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